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Queensland Building and Construction Commission v Ezra Constructions Pty Ltd

 

[2019] QCA 304

SUPREME COURT OF QUEENSLAND

CITATION:

Queensland Building and Construction Commission & Ors v Ezra Constructions Pty Ltd & Ors [2019] QCA 304

PARTIES:

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(first appellant)

BRETT BASSETT AS THE COMMISSIONER OF THE QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(second appellant)

MARK E WILSON

(third appellant)

v

EZRA CONSTRUCTIONS PTY LTD

ABN 95 610 779 952

(first respondent)

GARNET CONSTRUCTIONS PTY LTD

ABN 27 611 809 913

(second respondent)

JAMES RAPTIS

(third respondent)

FILE NO/S:

Appeal No 3785 of 2019

SC No 5323 of 2018

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2019] QSC 47 (Boddice J)

DELIVERED ON:

20 December 2019

DELIVERED AT:

Brisbane

HEARING DATE:

28 August 2019

JUDGES:

Gotterson and McMurdo JJA and Brown J

ORDERS:

  1. Appeal allowed.
  2. Orders made on 12 March 2019 set aside.
  3. Amended originating application dismissed.
  4. Respondents pay to the appellants their costs of the appeal and the proceeding in the Trial Division.

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – INTERPRETATION ACTS AND PROVISIONS – PRESERVATION OF RIGHTS, LIABILITIES AND LEGAL PROCEEDINGS ON AMENDMENT, REPEAL, LAPSING ETC OF ACT OR PROVISION – ACCRUED RIGHT, PRIVILEGES AND LIABILITIES – where the third respondent was a director of the second respondent and an influential person of the first respondent – where each respondent held a building licence under the Queensland Building and Construction Commission Act – where the third respondent was a director of another company, which did not perform building work and was placed into voluntary administration in 2014 – where that event made the third respondent an excluded person under the Act and therefore made each respondent’s licence susceptible to cancellation by the appellant commission – where the commission issued notices to the respondents in 2018, beginning the process by which the respondents’ licences could be cancelled – where amendments made to the relevant act in 2015, if they applied, would not have categorised the third respondent as an excluded person, thereby immunising the respondents’ licences against susceptibility to cancellation – where those amendments also repealed the right of a person to apply to be categorised as a permitted person, which could have been a process by which the respondents avoided the risk of licence cancellation – where the amending act contained transitional provision relating to rights and liabilities accrued under the Act prior to its amendment – whether the third respondent’s status as an excluded person was preserved – whether the third respondent’s purportedly accrued right to apply for categorisation as a permitted person was preserved – whether the notices under the Act were validly issued

Queensland Building and Construction Commission Act 1991 (Qld), s 56AC, s 56AD, s 56AF, s 56AG

Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld), s 57, s 58, s 59

COUNSEL:

R J Anderson QC, with S E Seefeld, for the appellants

F L Harrison QC, with C D Coulsen, for the respondents

SOLICITORS:

Queensland Building and Construction Commission for the appellants

Holt Lawyers for the respondents
  1. [1]
    GOTTERSON JA:  I agree with the orders proposed by McMurdo JA and with the reasons given by his Honour.
  2. [2]
    McMURDO JA:  Each of the respondent companies and the other respondent, Mr Raptis, holds a building licence under the Queensland Building and Construction Commission Act 1991 (Qld) (“the Act”).  Mr Raptis is a director of one of the companies and, it is common ground, an “influential person” of the other company under s 4AA of the Act.
  3. [3]
    Mr Raptis was also a director of a company called RT No 2 Pty Ltd (“RT 2”) until 29 September 2014, which was the day before it was placed into voluntary administration.  RT 2 was not a construction company and did not hold a licence under the Act.  However, subject to one argument for the appellants to which I will return, the consequence of RT 2 being placed under administration, under the terms of the Act at that time, was that Mr Raptis became what the Act described as an “excluded individual for a relevant event”.  As such, he was susceptible to action by the appellant commission to cancel his licence.  In addition, any company of which Mr Raptis was a director, secretary or influential person thereby became an “excluded company”, and susceptible to action by the commission to cancel its licence.
  4. [4]
    Under the Act as it was at that time, and relevantly remained until July 2015, it was open to Mr Raptis to apply to the commission, to be categorised as a “permitted individual”, upon the basis that he had taken all reasonable steps to avoid the coming into existence of the circumstances that resulted in the voluntary administration of RT 2.  Had that application been made, and had the commission categorised him as a permitted individual, he would have been taken not to be an excluded individual, and consequently, the appellant companies would not have been excluded companies.
  5. [5]
    For whatever reason, the commission apparently took no steps to cancel the respondents’ licences, until 2018.  And Mr Raptis took no step to have the commission categorise him as a permitted individual.  This dispute arose only after, in April 2018, the commission issued notices, signed by the third appellant to this appeal, addressed to each respondent and informing them that they had 28 days to make submissions as to why their licences should not be cancelled.  The respondents presented submissions, and on 18 June 2018, the commission issued further notices which, in effect, maintained its case and rejected the respondents’ submissions.[1]
  6. [6]
    Most of the questions in this case arise because of amendments which were made to relevant provisions of the Act, with effect from July 2015.  As I will discuss, had RT 2 been placed under administration after those amendments took effect, that event would not have made Mr Raptis an excluded individual, or the respondent companies excluded companies.  The reason is that RT 2 was not a construction company, that is to say it was not a company which, directly or indirectly, carried out building work or building work services in Queensland or another state, nor had it been such a company, at least within any relevant time.  On the terms of the Act, as it was in September 2014, when RT 2 was placed into administration, it did not matter that it was not a construction company.
  7. [7]
    Another relevant amendment at the same time was that a person who became an excluded individual, by an event occurring after July 2015, would endure that status for a period of three years, whereas previously, the period was five years.
  8. [8]
    A third relevant amendment was that what had been s 56AD of the Act, under which a person might avoid a status of being an excluded individual, by successfully applying to the commission to be categorised as a permitted individual, was repealed.  Clearly, that avenue for avoiding the consequence of being an excluded individual is no longer available, where a person becomes an excluded person by an event occurring after July 2015.  However, whether that avenue was still available in this case, where the event had occurred before July 2015, is not so clear and is a subject of dispute between the parties.
  9. [9]
    The respondents brought this proceeding in the trial division, seeking judicial review of the decisions to issue notices to the respondents in April 2018.  They argued that for a number of reasons, the notices were not valid notices under the Act.  In the judgment under appeal,[2] it was held that the notices were invalid, essentially because, upon the proper construction of the Act and its transitional provisions for the relevant amendments in 2015, it was still open to Mr Raptis to apply to be categorised as a permitted individual, and to thereby remove the status of the respondents as excluded companies or an excluded individual.  The primary judge declared that each of the April notices was not a valid notice, and that those notices, together with the notices of June 2018, should be set aside. The commission, its commissioner and the issuer of the notices now appeal that judgment and seek to have it set aside and in lieu thereof an order made dismissing the respondents’ originating application.

The Act before the amendments

  1. [10]
    Until July 2015, s 56AC of the Act provided:

56AC Excluded individuals and excluded companies

  1. (1)
    This section applies to an individual if –
  1. (a)
    after the commencement of this section, the individual takes advantage of the laws of bankruptcy or becomes bankrupt (relevant bankruptcy event); and
  1. (b)
    5 years have not elapsed since the relevant bankruptcy event happened.
  1. (2)
    This section also applies to an individual if –
  1. (a)
    after the commencement of this section, a company, for the benefit of a creditor –
  1. (i)
    has a provisional liquidator, liquidator, administrator or controller appointed; or
  1. (ii)
    is wound up, or is ordered to be wound up; and
  1. (b)
    5 years have not elapsed since the event mentioned in paragraph (a)(i) or (ii) (relevant company event) happened; and
  1. (c)
    the individual –
  1. (i)
    was, when the relevant company event happened, a director or secretary of, or an influential person for, the company; or
  1. (ii)
    was, at any time after the commencement of this section and within the period of 1 year immediately before the relevant company event happened, a director or secretary of, or an influential person for, the company.
  1. (3)
    If this section applies to an individual because of subsection (1), the individual is an excluded individual for the relevant bankruptcy event.
  1. (4)
    If this section applies to an individual because of subsection (2), the individual is an excluded individual for the relevant company event.
  1. (5)
    An excluded individual for a relevant event does not also become an excluded individual for another relevant event if the commission is satisfied that both events are consequences flowing from what is, in substance, the one set of circumstances.
  1. (6)
    A company is an excluded company if an individual who is a director, or secretary of, or an influential person for, the company is an excluded individual for a relevant event.”
  1. [11]
    On the appellants’ case, the voluntary administration of RT 2 engaged subsection (2).  “For the benefit of a creditor”, an administrator was appointed to RT 2, which was the “relevant company event”, and Mr Raptis was, within a period of one year immediately before that event, a director of the company.  The respondents’ argument is that subsection (2) was not engaged, because the appointment of the administrator of RT 2 was not proved to have been “for the benefit of a creditor”.  That cannot be accepted, for reasons which are given later in this judgment.  Section 56AC therefore applied to Mr Raptis because of subsection (2), and he thereby came “an excluded individual for the relevant company event”.  And each of the respondent companies became an “excluded company” under subsection (6).
  2. [12]
    The relevant consequences of Mr Raptis, as a licensee, becoming an excluded individual for a relevant event, were prescribed by s 56AF as follows:

56AF Procedure if licensee is excluded individual

  1. (1)
    This section applies of the commission considers that an individual who is a licensee is an excluded individual for a relevant event.
  1. (2)
    The commission must give the individual a written notice identifying the relevant event and stating the following:
  1. (a)
    why the commission considers the individual is an excluded individual for the relevant event;
  1. (b)
    the individual may apply to the commission to be categorised as a permitted individual for the relevant event if the individual has not already done so;
  1. (c)
    the circumstances, stated in subsection (3), in which the commission must cancel the individual’s licence.
  1. (3)
    The commission must cancel the individual’s licence by written notice given to the individual if –
  1. (a)
    the individual has not already applied to be categorised as a permitted individual for the relevant event, and the individual does not apply for the categorisation within 28 days after the commission gives the individual the written notice under subsection (2); or
  1. (b)
    the individual has already applied to be categorised as a permitted individual for the relevant event, or the individual applies for the categorisation within the 28 days mentioned in paragraph (a), but –
  1. (i)
    the commission refuses the application; and
  1. (ii)
    either of the following applies –
  1. (A)
    the period for applying for a review of the decision to refuse has ended and no application for review has been made;
  1. (B)
    an application for review has been made and the commission’s decision is confirmed, or the application is not proceeded with.”
  1. [13]
    A similar procedure was prescribed, by s 56AG, for a licensee which was an excluded company:

56AG Procedure if licensee is excluded company

  1. (1)
    This section applies if the commission considers that a company that is a licensee is an excluded company.
  1. (2)
    The commission must give the company a written notice stating the following:
  1. (a)
    particulars identifying the individual (the relevant individual) who is a director or secretary of, or an influential person for, the company and who is an excluded individual for a relevant event;
  1. (b)
    particulars identifying the relevant event;
  1. (c)
    within 28 days after the commission gives the company the written notice, the relevant individual must –
  1. (i)
    stop being a director, secretary or influential person; or
  1. (ii)
    if the individual is eligible to do so but has not already done so, apply to the commission to be categorised as a permitted individual for the relevant event;
  1. (d)
    the circumstances, stated in subsections (3), (4) and (5), in which the commission must cancel the company’s licence.
  1. (3)
    The commission must cancel the company’s licence by written notice given to the company if, within the 28 days mentioned in subsection (2)(c), the relevant individual –
  1. (a)
    does not stop being a director or secretary of, or an influential person for, the company; and
  1. (b)
    if the relevant individual is eligible to do so but has not already done so, does not apply to be categorised as a permitted individual for the relevant event.
  1. (4)
    The commission must also cancel the company’s licence by written notice given to the company if all of the following apply–
  1. (a)
    the relevant individual has already applied to be categorised as a permitted individual for the relevant event, or the relevant individual applies for the categorisation within the 28 days mentioned in subsection (2)(c);
  1. (b)
    the commission refuses the application and the relevant individual does not stop being a director, secretary or influential person;
  1. (c)
    either –
  1. (i)
    the period for applying for a review of the decision to refuse has ended and no application for review has been made; or
  1. (ii)
    an application for review has been made and the commission’s decision is confirmed, or the application is not proceeded with.
  1. (5)
    The commission must also cancel the company’s licence by written notice given to the company if the relevant individual is not eligible to apply to the commission to be categorised as a permitted individual for the relevant event and the relevant individual does not, within the 28 days mentioned in subsection (2)(c), stop being a director, secretary or influential person.”
  1. [14]
    Under those provisions, the first of those consequences was that, if the commission considered that Mr Raptis was an excluded individual (and the respondent companies were excluded companies), the commission was bound to give the notice required by subsection (2) in each section.  In each case, the notice was to inform Mr Raptis, or the companies, that Mr Raptis might apply to the commission to be categorised as a permitted individual for the relevant event, if he had not already done so.
  2. [15]
    Subsection (3) of ss 56AF and 56AC obliged the commission to cancel the licence of the recipient, absent the excluded individual being categorised as a permitted individual.
  3. [16]
    The process by which an individual might be categorised as a permitted individual was prescribed by s 56AD, which was relevantly in these terms:

56AD Becoming a permitted individual

  1. (1)
    An individual may apply to the commission, in the form approved by the Board, to be categorised as a permitted individual for a relevant event if the individual has been advised by the commission, or has otherwise been made aware, that the commission considers the individual to be an excluded individual for the relevant event.
  1. (2)
    However, if as a result of the application the individual is not categorised as a permitted individual for the relevant event, the individual may not, while the individual is an excluded individual for the relevant event, again apply to be categorised as a permitted individual for the relevant event.
  1. (3)
    If the individual applies, the application must include the reasons why the commission should categorise the individual as a permitted individual for the relevant event.
  1. (4)
    If the individual is a director or secretary of, or influential person for, a company that is a licensee, the company is taken to be a party to the application, and may make submissions to the commission about the application.

  1. (8)
    The commission may categorise the individual as a permitted individual for the relevant event only if the commission is satisfied, on the basis of the application, that 

  1. (b)
    the individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event.

(8A) For subsection (8)(b), in deciding whether an individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of a relevant event, the commission must have regard to action taken by the individual in relation to the following –

  1. (a)
    keeping proper books of account and financial records;
  1. (b)
    seeking appropriate financial or legal advice before entering into financial or business arrangements or conducting business;
  1. (c)
    reporting fraud or theft to the police;
  1. (d)
    ensuring guarantees provided were covered by sufficient assets to cover the liability under the guarantees;
  1. (e)
    putting in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts;
  1. (f)
    making appropriate provision for Commonwealth and State taxation debts.

(8B) Nothing in subsection (8A) prevents the commission from having regard to other matters for deciding whether an individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of a relevant event.

  1. (9)
    If an individual is categorised as a permitted individual for a relevant event, the individual is taken not to be an excluded individual for the relevant event.”

The Act after the amendments

  1. [17]
    Section 56AC came to be as follows:

56AC Excluded individuals and excluded companies

  1. (1)
    This section applies to an individual if –
  1. (a)
    the individual takes advantage of the laws of bankruptcy or becomes bankrupt (relevant bankruptcy event); and
  1. (b)
    3 years have not elapsed since the relevant bankruptcy event happened.
  1. (2)
    This section also applies to an individual if –
  1. (a)
    A construction company, for the benefit of a creditor –
  1. (i)
    has a provisional liquidator, liquidator, administrator or controller appointed; or
  1. (ii)
    is wound up, or is ordered to be wound up; and
  1. (b)
    3 years have not elapsed since the event mentioned in paragraph (a)(i) or (ii) (relevant company event) happened; and
  1. (c)
    The individual –
  1. (i)
    was, when the relevant company event happened, a director or secretary of, or an influential person for, the construction company; or
  1. (ii)
    was, within the period of 2 years immediately before the relevant company event happened, a director or secretary of, or an influential person for, the construction company.
  1. (3)
    If this section applies to an individual because of subsection (1), the individual is an excluded individual for the relevant bankruptcy event.
  1. (4)
    If this section applies to an individual because of subsection (2), the individual is an excluded individual for the relevant company event unless the individual can satisfy the commissioner that at the time the individual ceased to be an influential person, director or secretary for the construction company the company was solvent.
  1. (5)
    An excluded individual for a relevant event does not also become an excluded individual for another event if the commission is satisfied that both events are consequences flowing from what is, in substance, the one set of circumstances.
  1. (6)
    A company is an excluded company if an individual who is a director or secretary of, or an influential person for, the construction company is an excluded individual for a relevant event.
  1. (7)
    In this section –

construction company

  1. (a)
    means a company that directly or indirectly carries out building work or building work services in this or another State; and
  1. (b)
    includes a company that, within 2 years immediately before a relevant company event for the company, directly or indirectly carries out building work or building work services in this or another State.”
  1. [18]
    As already noted, the period for which a person would remain an excluded individual became three years, rather than five years, and the “relevant company event” had to be something which had happened to a construction company, as defined in subsection (7).  At no material time was RT 2 a construction company.
  2. [19]
    Section 56AF, as amended, became relevant as follows:

56AF Procedure if licensee is excluded individual

  1. (1)
    This section applies if the commission considers that an individual who is a licensee is an excluded individual for a relevant event.
  1. (2)
    The commission must give the individual a written notice identifying the relevant event and stating the following –
  1. (a)
    why the commission considers the individual is an excluded individual for the relevant event;
  1. (b)
    that the individual may make a submission to the commission about the relevant event within the reply period;
  1. (c)
    the circumstances, stated in subsection (3), in which the commission must cancel the individual’s licence.
  1. (3)
    The commission must cancel the individual’s licence, by written notice given to the individual, if –
  1. (a)
    after considering any submission about the notice made by the individual within the reply period, the commission still considers the individual is an excluded individual for a relevant event; or
  1. (b)
    the individual does not make a submission about the notice within the reply period.

  1. (4)
    In this section –

reply period, for a written notice given under subsection (2), means 28 days after the commission gives an individual the written notice.”

  1. [20]
    Similar amendments were made to s 56AG so that it was in these terms:

56AG Procedure if licensee is excluded company

  1. (1)
    This section applies if the commission considers that a company that is a licensee is an excluded company.
  1. (2)
    The commission must give the company a written notice stating the following –
  1. (a)
    particulars identifying the individual (the relevant individual) who is a director or secretary of, or an influential person for, the company and who is an excluded individual for a relevant event;
  1. (b)
    particulars identifying the relevant event;
  1. (c)
    within 28 days after the commission gives the company the written notice, the relevant individual must stop being a director, secretary or influential person;
  1. (d)
    the circumstances, stated in subsections (3), (4), and (5), in which the commission must cancel the company’s licence.
  1. (3)
    The commission must cancel the company’s licence by written notice given to the company if, within the 28 days mentioned in subsection (2)(c), the relevant individual does not stop being a director or secretary of, or an influential person for, the company.”
  1. [21]
    At the same time, s 56AD was omitted.  Consequently, ss 56AF and 56AG, as amended, made no reference to a permitted individual.  Those sections provided an avenue by which the individual might make a submission to the effect that he or she was not an excluded individual.  Such a submission might include an argument that, in the terms of s 56AC(4), the individual ceased to be an influential person, director or secretary for the construction company at a time when that company was solvent.
  2. [22]
    Therefore there was a difference between the ways in which an individual’s status, as an excluded individual, could be challenged under the amended provisions, and the way in which that could be done under the pre-amendment provisions, which was by seeking to have the commission categorise the person as a permitted individual.
  3. [23]
    These amendments were made by the Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld) (“the Amendment Act”).  This contained transitional provisions, relevantly as follows:

53 Definitions for pt 11

In this Part

Amendment Act means the Queensland Building and Construction Commission and Other Legislation Amendment Act 2014.

commencement means the commencement of the provision in which the term is used.

former, in relation to a provision, means the provision as in force immediately before the amendment of the provision under the Amendment Act.

57 Categorisation as excluded individual or permanently excluded individual continues

  1. (1)
    An individual who, immediately before the commencement, was an excluded individual for a relevant bankruptcy or company event under former section 56AC continues to be an excluded individual for the relevant bankruptcy or company event under former section 56AC as if that section had not been amended by the Amendment Act.

Note

The individual would continue under former section 56AC to be an excluded individual until 5 years had elapsed from the day the relevant bankruptcy or company event happened.

  1. (2)
    An individual who, immediately before the commencement, was a permanently excluded individual under former section 58 continues to be a permanently excluded individual despite any amendment of parts 3A or 3B under the Amendment Act.
  1. (3)
    However, section 61 continues to apply to the person.

58 Becoming a permitted individual after the commencement

  1. (1)
    Subsection (2) applies if –
  1. (a)
    the commission gave an individual a written notice under former section 56AF(2) before the commencement; and
  1. (b)
    at the commencement, 28 days have not elapsed from the day the commission gave the person the notice mentioned in paragraph (a).
  1. (2)
    The person may apply to the commission, and the commission may consider and decide the application, under former section 56AD, as if that section had not been repealed under the Amendment Act.
  1. (3)
    Subsection (4) applies if, before the commencement, an individual applied to the commission under former section 56AD and the commission had not finally dealt with the application.
  1. (4)
    The commission may continue to consider and decide the application, under former section 56AD, as if that section had not been repealed under the Amendment Act.
  1. (5)
    To remove any doubt it is declared that the commission may categorise the person as a permitted individual despite the repeal of former section 56AD by the Amendment Act.

59 Categorisation as permitted individual continues

  1. (1)
    A permitted individual for a relevant event continues to be taken not to be an excluded individual for the relevant event.
  1. (2)
    The relevant event must not be counted in deciding, under section 61, whether the individual is or continues to be a permanently excluded individual.
  1. (3)
    In this section –

Permitted individual means

  1. (a)
    an individual categorised as a permitted individual for a relevant event under former section 56AD if –
  1. (i)
    the person continued to be categorised as a permitted individual immediately before the commencement; or
  1. (ii)
    the person is categorised as a permitted individual after the commencement because of schedule 1, section 58; or
  1. (b)
    an individual categorised as a permitted individual for a relevant event as result of the tribunal reversing the commission’s decision not to categorise the individual as a permitted individual for the relevant event after a review of the decision by the tribunal.”
  1. [24]
    If Mr Raptis was an excluded individual, in consequence of the appointment of an administrator to RT 2, he was an individual within s 57(1) of the Amendment Act.  Consequently, he continued to be an excluded individual for the relevant company event under former section 56AC as if that section had not been amended by the Amendment Act.  Notably, s 57(1) did not provide that such an individual was deemed to be an excluded individual under s 56AC, as it became after it was amended.
  2. [25]
    One consequence of the individual continuing to be an excluded individual under the former provision was that the period of exclusion, according to the former provision, remained five years from the relevant event.[3]
  3. [26]
    Section 58 of the Amendment Act anticipated two situations, and effectively preserved the former provisions of the Act by which a person could become a permitted individual.  One of those situations was where, at the commencement of the amendments, the commission had given an individual a written notice under the former s 56AF(2), and 28 days had not elapsed from that notice.  In such a case, the individual was able to apply to the commission under the former s 56AD, as if that section had not been repealed.  The other situation was where, as at the commencement, an individual had applied under the former s 56AD, and the commission had not finally dealt with the application.  In such a case, the commission might continue to consider and decide the application, under former s 56AD as if that section had not been repealed.
  4. [27]
    By s 58(5), it was declared that, for the removal of any doubt, the commission might categorise “the person” as a permitted individual despite the repeal of s 56AD.  This reference to “the person”, rather than “a person”, supports an interpretation of s 58(5) that it is limited to a situation of one of the two kinds for which the balance of s 58 provided.  In other words, s 58(5) was not a declaration that, for example, any excluded individual might be categorised by the commission as a permitted individual, despite the repeal of s 56AD.

The 2018 notices

  1. [28]
    It is unnecessary to set out here the full terms of each of the notices, provided by the commission in 2018.  It is sufficient to say something of the notice, given in April 2018, to Mr Raptis.
  2. [29]
    That notice identified the event as the appointment of administrators to RT 2 on or about 30 September 2014.  It stated that the commission considered that Mr Raptis was an excluded individual, for the reason that he was a director, secretary or influential person of that company at the time, or within two years, of the event.  (In that last respect, the notice was referring to s 56AC, as amended, but if that was a misstatement, it did not affect the validity of the notice.)  The notice informed Mr Raptis of his right to make a submission as to why he was not an excluded individual for the relevant event.  In that way, the notice followed the terms of the amended s 56AF, most importantly because it said nothing about an application to be categorised as a permitted individual.

Section 56AF

  1. [30]
    Section 56AF is engaged, according to subsection (1), if the commission considers that an individual who is a licensee is an excluded individual for a relevant event.  The submission for the appellants is that Mr Raptis was such a person.  The submission for the respondents is that he was not, because of the definition of “excluded individual” in Schedule 2 of the Act, where it is defined as follows:

Excluded individual, for a relevant event, see section 56AC(3) and (4).”

The respondents’ submission is that this is a reference to s 56AC(3) and (4), as amended in 2015.  In s 56AC(4) it is provided that a person is an excluded individual “if this section applies to an individual because of subsection (2)”, and the (amended) terms of subsection (2) provide that the section applies to an individual where the relevant event involves not any company, but a construction company, and where no more than three years have elapsed since the event.  As RT 2 was not a construction company, and more than three years had elapsed from the event by April 2018, s 56AC did not apply to Mr Raptis because of subsection (2), and therefore he was not an excluded individual for that event.  Consequently, the respondents say his licence was no longer susceptible to cancellation under s 56AF.

  1. [31]
    That argument for the respondents appears to disregard s 57 of the Amendment Act.  By that provision, Mr Raptis continued to be an excluded individual until five years had elapsed from 30 September 2014.  The apparent effect of s 57 is sought to be explained away by the following argument for the respondents.
  2. [32]
    Section 57, it is said, should be taken to be dealing with the case of a person who had already become “categorised” as an excluded individual, in the sense that the commission had taken action, and in the course of doing so, had determined that the person fell within the definition of an excluded person.  It is submitted that, in referring to the “categorisation” as an excluded individual continuing, s 57 is referring to categorising that happened when, before the amendments took effect, a notice under the former s 56AF was given, and either the individual did not apply to be categorised as a permitted individual, or if the individual did so apply, the commission rejected that application.
  3. [33]
    That submission cannot be accepted.  Importantly, contrary to the submission, s 57 does not use the words “categorised” or “categorisation”.  The former s 56AD referred to the categorisation of a person as a permitted individual, but in no place did the pre-amendment provisions refer to the “categorisation” of a person as an excluded individual.  This was because a person became an excluded individual, not by any action of the commission, but by the occurrence of a set of circumstances as defined in s 56AC.
  4. [34]
    Consequently, s 57 of the Amendment Act did not continue a so-called “categorisation” of a person as an excluded individual.  Rather, it preserved the status of a person as such, namely as an excluded individual for that relevant event.  It provides that someone who was an excluded individual, immediately prior to the amendments, continued to be so after the amendments.  The respondents’ attempt to diminish the effect of s 57 should be rejected.
  5. [35]
    Consequently, it cannot have been intended that a person’s status as an excluded individual would be continued, but that this could not affect the existence of their building licence.  The question then is how, in a case such as this one, the person’s licence could be affected.  The appellants’ submission is that the licence could be affected only by the commission acting under the current terms of s 56AF.  Schedule 2 of the Act refers, for the meaning of “excluded individual”, to s 56AC(3) and (4).  But in a case which is affected by s 57 of the Amendment Act, necessarily that is a reference to the former s 56AC, as if that section had not been amended.
  6. [36]
    The appellants argue that, outside either of the situations for which s 58 of the Amendment Act provides, for an excluded individual, such as Mr Raptis, the commission could, and would be required to, give a written notice in the terms prescribed by s 56AF(2), and cancel the individual’s licence, in the circumstances prescribed by s 56AF(3).
  7. [37]
    The effect of the appellants’ argument is that it would not then be open to Mr Raptis to seek a categorisation under the former s 56AD.  But that is clearly the intended outcome.  The evident intention of the parliament was to remove that process, preserving it only by the transitional provision of s 58, in cases within one of the two specific situations which are stipulated by s 58.
  8. [38]
    It is unsurprising that provision was made for the ongoing operation of s 56AD in those two situations.  Under the first of them, namely where the commission had given a notice under the former s 56AF(2), and 28 days had not elapsed from the notice when the amendments commenced, the person would have become subject to an accrued liability, within the meaning of s 20(2) of the Acts Interpretation Act,[4] but which was qualified by an accrued right to apply for a categorisation under s 56AD.  In the second of those situations, namely where by then the person had applied under s 56AD, there would have been an accrued right to have that application dealt with under s 56AD.  The evident intent of s 58 was to preserve accrued rights and liabilities in that way, but otherwise not to preserve the operation of the repealed s 56AD.
  9. [39]
    Notably, the transitional provisions did not preserve the operation of the former s 56AF or s 56AG.  Where the operation of s 56AD was preserved only in the two situations referred to in s 58, it was unnecessary to preserve the operation of those former provisions.  In the first situation, a notice would already have been given to the individual under the former s 56AF.  In the second situation, the unresolved application for categorisation might have had one of two outcomes.  If it was favourable to the individual, nothing more would happen.[5]  If it was unfavourable, then the person would continue as an excluded individual (under s 57 of the Amendment Act) and would be susceptible to action by the commission under the new s 56AF.
  10. [40]
    The primary judge considered that the right to apply for categorisation as a permitted individual was a substantive right and that the amendments to the Act in 2015, including the repeal of s 56AD, would have a retrospective operation if that right was to be denied.  His Honour referred to the well-known statement by Dixon CJ in Maxwell v Murphy[6] that a statute changing the law ought not, unless the intention appears with reasonable certainty, be understood to affect rights or liabilities which the law had defined by reference to past events.  For the same reason, his Honour concluded that by s 20(2) of the Acts Interpretation Act, the right to apply for categorisation as a permitted individual, being an accrued right in his Honour’s view, was preserved, in the absence of a clearly expressed contrary intention.
  11. [41]
    It will be evident that I respectfully disagree with his Honour’s reasoning.  Even if the repeal of s 56AD, and the amendment of provisions so as to remove the references to a permitted individual, might be thought to affect an accrued right to apply for categorisation, in my view the legislation unambiguously removed that right.  It did so not only by the terms of s 58 of the Amendment Act, but also by the absence of any express preservation of the operation of the former s 56AF.
  12. [42]
    Consequently, I disagree with his Honour’s conclusion that the right to seek categorisation as a permitted individual continued, and that the notices given in April 2018 were invalid because they purported to preclude that process.

The other arguments for the respondents

  1. [43]
    In their Notice of Contention, at paragraph 2(a), the respondents argue that the appointment of administrators to RT 2 was not an event “for the benefit of a creditor” within s 56AC(2) of the Act.
  2. [44]
    Section 56AC(2) provided that there was a relevant company event when:

“(a) … a company, for the benefit of a creditor

  1. (i)
    has a provisional liquidator, liquidator, administrator or controller appointed; or
  1. (ii)
    is wound up, or is ordered to be wound up …”

(Emphasis added.)

  1. [45]
    Within this contention, there are two arguments.  The first is that, it is said, where directors appoint an administrator, they do so in order to protect themselves from personal liability for insolvent trading, and not to benefit creditors.  The second is that the provision refers to something being done for the benefit of a creditor, rather than for the benefit of creditors of a company.  Under this second argument, the appointment of the administrator must not only be made for the benefit of a creditor, it must also be made for the benefit of one creditor only.  Neither of those arguments can be accepted.
  2. [46]
    As to the first of them, the assertion that administrators are appointed solely to benefit the directors is inconsistent with s 435A of the Corporations Act 2001 (Cth), which provides that the object of Part 5.3A of that Act is:

“... to provide for the business, property and affairs of an insolvent company to administer in a way that:

  1. (a)
    maximises the chances of the company, or as much as possible of its business, continuing in existence; or
  1. (b)
    if it is not possible for the company or its business to continue in existence – results in a better return for the company’s creditors and members and would result from an immediate winding-up of the company.”

Clearly then, at least one of the purposes of the appointment of an administrator is to benefit creditors.

  1. [47]
    The second argument is remarkable for the likely consequences of its acceptance.  A director of an insolvent company, which had but one creditor, would become an excluded individual on the appointment of an administrator, whereas the discovery of a second creditor would save that director from the consequences, under this legislation, of being an excluded individual.  There is no purpose which could be served by such a distinction.  And where, as is usually the case, an insolvent company has more than one creditor, it would be irrational to exclude an individual only if the appointment was to benefit one creditor, but not the others.  Again, no purpose of the Act would be served by that distinction.  In any case, s 32C of the Acts Interpretation Act provides that, in an Act, words in the singular are presumed to include the plural, and there is no reason to displace that presumption.
  2. [48]
    Consequently this contention, that there was no relevant company event, must be rejected.
  3. [49]
    A further argument, raised by the Notice of Contention, is that the notices of April 2018 were invalid, because under the terms of the Act at that time, the relevant company event did not involve a construction company.  That argument cannot be accepted, for reasons which I have expressed already.  Section 56AF of the Act, as amended in 2015, applied because Mr Raptis was an excluded individual for a relevant event, by the operation of the former s 56AC which was continued in force, in his case, by s 57 of the Amendment Act.  Once that is accepted, s 56AF applied irrespective of whether RT 2 had been or was a construction company.
  4. [50]
    The third argument which is raised by the Notice of Contention, is not one which could affect the validity of the April 2018 notices.  The argument is that s 56AF(3) has not yet been engaged, because the commission has not yet said that, having considered a submission in response to its notice under s 56AF(2), “the commission still considers the individual is an excluded individual for a relevant event.”  This situation appears to be the result of mistakes by each side.  In response to the April notices, submissions were made to the commission which were wrongly described as submissions on behalf of the respondent companies, rather than on behalf of Mr Raptis.  The companies had no right to make such submissions, but only a right to seek an internal review under s 86A of the Act.  After some correspondence between the commission and the respondents’ solicitors, it was agreed that the commission would treat the submissions as having been made on behalf of Mr Raptis.  By subsection (3), the commission was to cancel his licence if, after considering those submissions, it still considered that he was an excluded individual for a relevant event.  However in its decision notice, the commission said that it had made a decision, in his case, under s 86C of the Act, rather than under s 56AF.  It is accepted by the commission that it is yet to state its decision under that provision.
  5. [51]
    However this point is inconsequential, because the commissioner is able to formally decide the question under that provision if, as would be expected, it wishes to do so, in which case it would then cancel Mr Raptis’s licence.

Conclusion and orders

  1. [52]
    On 30 September 2014, Mr Raptis became an excluded individual for a relevant company event, under the then terms of s 56AC of the Act.  After the Amendment Act came into force in relevant respects (on 1 July 2015), Mr Raptis continued to be an excluded individual under the former s 56AC, as if it had not been amended.  He was still an excluded individual in April 2018, when the commission issued the notices in question.  Those notices were validly given under the terms of s 56AF at that time.  Consequently, the relief granted by the primary judge ought not to have been granted, and the application should have been dismissed.
  2. [53]
    I would order as follows:
  1. Appeal be allowed.
  2. Orders made on 12 March 2019 be set aside.
  3. Amended originating application be dismissed.
  4. Respondents pay to the appellants their costs of the appeal and the proceeding in the Trial Division.
  1. [54]
    BROWN J:  I agree with the orders proposed by McMurdo JA and with the reasons given by his Honour.

Footnotes

[1] By the notices issued in April, the commission had also relied upon another event, namely the appointment of liquidators to a company called RT No 3 Pty Ltd, in late 2015.  The notices of June 2018 advised that the respondents were not excluded companies or an excluded individual, by reason of that event, rather than by the appointment of administrators to RT 2.

[2] Ezra Constructions Pty Ltd & Ors v Queensland Building and Construction Commission & Ors [2019] QSC 47 (“the primary judgment”).

[3] The Note to s 57(1) is part of the Amendment Act, by s 14(4) of the Acts Interpretation Act 1954 (Qld).

[4] D’Arro v Queensland Building and Construction Commission [2018] 1 Qd R 204 at 217 [33]; [2017] QCA 90 at [33].

[5] Section 59(1) would apply as the individual would be a permitted individual in respect of the relevant event.

[6] (1957) 96 CLR 261 at 267; [1957] HCA 7.

Close

Editorial Notes

  • Published Case Name:

    Queensland Building and Construction Commission & Ors v Ezra Constructions Pty Ltd & Ors

  • Shortened Case Name:

    Queensland Building and Construction Commission v Ezra Constructions Pty Ltd

  • MNC:

    [2019] QCA 304

  • Court:

    QCA

  • Judge(s):

    Gotterson JA, McMurdo JA, Brown J

  • Date:

    20 Dec 2019

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2019] QSC 47 12 Mar 2019 Application to set aside notices issued by the respondent granted: Boddice J.
Appeal Determined (QCA) [2019] QCA 304 20 Dec 2019 Appeal allowed; orders made 12 March 2019 set aside; amending originating application dismissed: Gotterson and McMurdo JJA and Brown J.

Appeal Status

{solid} Appeal Determined (QCA)